Analyzing Granite Ridge Resources (NYSE:GRNT) and Cheniere Energy (NYSE:LNG)
by Danessa Lincoln · The Markets DailyCheniere Energy (NYSE:LNG – Get Free Report) and Granite Ridge Resources (NYSE:GRNT – Get Free Report) are both energy companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.
Institutional & Insider Ownership
87.3% of Cheniere Energy shares are held by institutional investors. Comparatively, 31.6% of Granite Ridge Resources shares are held by institutional investors. 0.6% of Cheniere Energy shares are held by company insiders. Comparatively, 8.6% of Granite Ridge Resources shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Analyst Recommendations
This is a summary of current ratings for Cheniere Energy and Granite Ridge Resources, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cheniere Energy | 0 | 2 | 16 | 3 | 3.05 |
| Granite Ridge Resources | 1 | 1 | 2 | 0 | 2.25 |
Cheniere Energy currently has a consensus target price of $298.47, suggesting a potential upside of 11.57%. Granite Ridge Resources has a consensus target price of $10.00, suggesting a potential upside of 106.10%. Given Granite Ridge Resources’ higher probable upside, analysts clearly believe Granite Ridge Resources is more favorable than Cheniere Energy.
Dividends
Cheniere Energy pays an annual dividend of $2.22 per share and has a dividend yield of 0.8%. Granite Ridge Resources pays an annual dividend of $0.44 per share and has a dividend yield of 9.1%. Cheniere Energy pays out 36.5% of its earnings in the form of a dividend. Granite Ridge Resources pays out -176.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Granite Ridge Resources is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Cheniere Energy has a beta of -0.01, meaning that its stock price is 101% less volatile than the S&P 500. Comparatively, Granite Ridge Resources has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.
Valuation and Earnings
This table compares Cheniere Energy and Granite Ridge Resources”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cheniere Energy | $19.98 billion | 2.81 | $5.33 billion | $6.08 | 44.00 |
| Granite Ridge Resources | $450.31 million | 1.42 | $24.35 million | ($0.25) | -19.41 |
Cheniere Energy has higher revenue and earnings than Granite Ridge Resources. Granite Ridge Resources is trading at a lower price-to-earnings ratio than Cheniere Energy, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Cheniere Energy and Granite Ridge Resources’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cheniere Energy | 7.23% | 38.95% | 9.34% |
| Granite Ridge Resources | -7.13% | 4.99% | 2.65% |
Summary
Cheniere Energy beats Granite Ridge Resources on 12 of the 17 factors compared between the two stocks.
About Cheniere Energy
Cheniere Energy, Inc., an energy infrastructure company, primarily engages in the liquefied natural gas (LNG) related businesses in the United States. It owns and operates the Sabine Pass LNG terminal in Cameron Parish, Louisiana; and the Corpus Christi LNG terminal near Corpus Christi, Texas. The company also owns Creole Trail pipeline, a 94-mile natural gas supply pipeline that interconnects the Sabine Pass LNG Terminal with several interstate and intrastate pipelines; and operates Corpus Christi pipeline, a 21.5-mile natural gas supply pipeline that interconnects the Corpus Christi LNG terminal with various interstate and intrastate natural gas pipelines. It is also involved in the LNG and natural gas marketing business. The company was incorporated in 1983 and is headquartered in Houston, Texas.
About Granite Ridge Resources
Granite Ridge Resources, Inc. operates as a non-operated oil and gas exploration and production company. It owns a portfolio of wells and acreage across the Permian and other unconventional basins in the United States. Granite Ridge Resources, Inc. is based in Dallas, Texas.